Commissioner of Income Tax vs DCM Sri Ram Industries Ltd.

Five questions of law on which the revenue seeks admission of this appeal are as follows:- 1) Whether income tax Appellate Tribunal was correct in law in allowing the assessee the amount of Rs. 9,29,571 being premium payable on redemption on debentures?

2) Whether income tax Appellate Tribunal was correct in law in allowing the Assessee a deduction of interest of Rs. 1,57,36,206 u/s 36(1)(iii) of the Act treating the same as revenue expenditure?

3) Whether income tax Appellate Tribunal was correct in law in allowing the interest to the assessee u/s 36(1)(iii) of the Act when the borrowed funds were used by the assessee for expansion of business?

4) Whether proviso to section 36(1)(iii) inserted by the Finance Act, 2003 is clarificatory in nature and therefore have retrospective effect if it is interpreted harmoniously with Explanation 8 to section 43(1)?

5) Whether income tax Appellate Tribunal was correct in law in allowing the assessee a deduction of Rs. 7,25,246 being the amount transferred to Molasses Storage Fund?

In respect of the first question, the income tax Appellate Tribunal has merely followed its orders for the earlier assessment years from 1991-92 onwards and these orders have been accepted by the revenue. There is no reason given why a departure should be made in respect of this assessment year 1997-98. 2. In respect of questions 2, 3 & 4, the Tribunal has followed its orders for the preceding assessment years from 1992-93 and these orders have been accepted by the revenue. Again there is no reason given why a departure should be made for the assessment year 1997-98.

In respect of the 5th question also the Tribunal has followed its orders for the preceding assessment years from 1991-92 onwards and these orders have been accepted by the revenue. Again there is no reason given for making departure in respect of this particular assessment year.

Following the view laid down by the Supreme Court and applying the rule of consistency as laid down in Berger Paints India Ltd. Vs. Commissioner of Income Tax, Calcutta, we are of the view that no substantial question of law arises for consideration. Dismissed.